tv Medicare For All Proposals Discussion CSPAN October 10, 2019 10:28am-11:46am EDT
democrats share that belief. 58% of americans think foreign governments are among the threats to the system. only 41% of republicans share in that concern. more than three-quarters of democrats and over half of independents believe that foreign governments may interfere with u.s. elections. 31% people believe the federal government has done enough to protect elections from foreign interference. 54% of republicans report having either a great deal or a fair amount of confidence in federal efforts. only 16% of democrats democrats and just over 25% of independents agree. you can find all of the results including what americans think presidential candidate should be required to release their tax returns and whether citizens should be required to show a government id to vote, at c-span.org. >> a look not at what medicare for all entails. the american enterprise institute hosted a discussion on various health care proposals
including medicare for all and the affordable care act. analysts include healthcare policy experts and journalists. >> thank you, everybody for coming. continue to enjoy your lunch. i'm tim carney, a visiting fellow here at american enterprise institute as well as being the commentary editor at the "washington examiner." we are here to talk about health care but i want to ask a a specific question about health care. it's a question that some people on the free enterprise side, the free-market conservative or libertarian side don't always ask, who benefits.
i think sometimes people on the right or right of center are uncomfortable with that question in policy debates because they say why should it matter who benefits? we see elizabeth warren will say tax cut is bad because rich people benefit. but i think it's actually a very important thing to talk about. one influences are debates get a free member and 20 -- 2008 campaign and the passage of obamacare, barack obama thought it was important to point out that he was battling the health care sector, that he was battling the drug drugmakers oe was battling the insurers. very important and interestingly, he was not telling the truth when he said that. it shaped the way obamacare turned out, that the hospitals and drugmakers were largely behind it, or they cut to craft certain principles. it helped us understand why the
bill became what it did. it's less surprising that we've seen hospital consolidation when you realize the big hospitals were supporting lots of the provisions in this bill. so following who benefits from something tells us very important things. today where logical to talk about medicare for all and the main way that gets pics is this is something that will benefit all patients come, can argue is that it will cost taxpayers. there's a lot more going on than that and that's what we will talk about. but not just medicare for all. other free-market conservative health care reforms, and got some people appear experts in that i first talked about obamacare and benefits from all these. and maybe the answer simply the patient's. maybe the answer is special interest. and then the corollary of
courses who suffers from these policies? we have an excellent panel to discuss it. first, age cunningham is a health care reporter who writes a newsletter for the "washington post", a former colleague of mine from the "washington examiner." michael cannon, and you guys i think receive their full bios so i will just give a brief summary. michael is the health care guy at cato and jim is one of the leading health care guys here at aei. i'm going to start with medicare for all and just ask page, from what you see from your reporting from how you see different people playing around, in various medicare for all proposals, who do you think benefits, thinks they're going to benefit, et cetera? what you see on this. >> was how much time do we have? it could be a really complex proposal and i think it can plant in a lot of ways for different parts but in general when you look at the consumer
it's going to be lower and middle income consumers that are going to benefit because what we're talking about is increasing taxes on businesses on employers, and the wealthy to pay from a comprehensive set of benefits for low income. i think particularly people that could benefit from a more copies of medicare for all people who been left behind by obamacare which is a people that are about 300, 400% federal poverty level, a little higher who may be eligible for very limited subsidies in the marketplaces but our speedy sorry, that's like a $60,000 income for a for a couple? >> sixty-$35,000, and those of folks i think that recognize to really still be struggling to afford the health insurance and the affordable care act didn't really help because of course the cost of private health coverage keeps going up, subsidies are enough to blow blt those cost for these consumers.
and, of course, i i guess you could say the losers are the top 10% or so of income earning americans who would have to pay for this. industry, industry has really come out against medicare for all. there's this partnership has been formed where pharma has come together with hospitals and the doctors were involved in this and they left over the summer but they had really been fighting medicare for all proposal. i think it could be a mixed bag for doctors and hospitals, depending on how this could be hashed out there on the one hand, you would, they would get more patient because you would reach universal coverage. they would have more people seeking the services but at the same time they would be paid less, probably closer to medicare rates which are significantly lower than what they get under private plans. drugmakers probably would be pretty bad for them because the government would have a much stronger role in determining how
much they could be paid, and health insurers are also really opposed to this because under bernie's plan physically envisions no role for them going forward. i think that's white scene of a industry push back. i will leave it there. >> thanks ravi, tim. i agree with much of what paige said but i think, it includes a lot of low income people who think they would benefit from medicare for all program. certainly most of the tax increases are being borne by higher income people and there are subsidies to people are not getting subsidies now, and those folks might see little, out of the pocket and more health care coming their way. they might think they benefit but let's also think that some of the ways in which some of the costs they bear or what they lose. they are losing any philly to
choose their own health insurance plan because according to bernie sanders under his plan the government will provide health care to everybody and jeff no choice of health insurance plans. they will outlaw private health insurance. you're losing your right to choose your own health plan. you are also going, people with lower incomes will lose because the impact when i would be felt by the people are paying those taxes. i do believe an order to pay for medicare for all system you have to text anybody can raise a voice taxes. no one would be an income tax increases. but even if your taxes go up by relatively little, the fact that bernie sanders would have to raise 16 to enforce something in your taxes over ten years, means that the economy is going to take a terrible hit. collecting one dollar in taxes doesn't cost one dollar.
it cost $1.30, or even at them margin up to two dollars. that additional increment is lost economic productivity. the president council of economic advisers put out a report where they made estimates, estimated that taxes would go up by $18,000 per household under an medicare for all plan by 2022. $18,000 in additional taxes per household. but the economy would experience somewhat slower growth as a result of that additional tax burden, that household income would be $17,000 lower than it was, that what otherwise would be without additional taxes. and even the lower income households would suffer because they would be less activity unless job creation, less growth. i don't think you can say though income people will do well under an medicare for all proposal.
because taxes don't you start the people who are paying those taxes. the aunt that, i think patients would also suffer because when you enroll anyone in the medicare program, you don't get any of the benefits of competition that you get right now between, there's not much competition, but there's some competition between different ways of organizing and financing the delivery of health care. you do get some competition between totally fee-for-service payment and other payment systems or ways of paying doctors and hospitals. we do see the fee-for-service has number of problems. it encourages unnecessary services, unnecessary admissions and so forth. we see spillover effects were other payment systems or insurers play a more aggressive role in managing utilization.
you do see a reduction in unnecessary expenditures, not only among the patients that those efforts are targeted at but even among the fee-for-service population that have to compete with those, with all those other ways of paying for health care. you get rid of all of that competition and the spillover effects that come from competition. patients would suffer. the big winners under an medicare for all system would be, first, a politician to decide how much we pay in taxes at how to spend all that money of hours. and as a result the lobbyists who already -- health care has only for the past 20 years let all industries in terms of expenditures on lobby. the lobbyists will make a bonanza when we go on the government purchasing 50% of the health care in the united states, the government purchasing something much closer
to 100%. there will be much more opportunity for lobbyists to make money influencing how that money spent so they will be the big winners. >> jim? >> thanks, tim, for having me on the panel. this doesn't make him change his mind but i agree with basically everything michael just that. i won't repeat all those points, all very good points. i think a couple things to note about medicare for all. what's the point of the program? the point is to bring the allocation of all the resources and health system into government control basically. and so as michael indicated the big loser here really in the first or analysis is anybody who they -- who is a wage under basically because the incidence of financing will move more heavily towards income-based taxation of some kind even payroll taxes income tax or some way of taxing the broad middle
class. senator sanders admits that, , d that means you end up taxing wages to some degree more than they are taxed now. i definition this will be a heavier burden on earned income. which is not necessary a good thing for the economy, for all the reasons michael just articulated. i think the other point though is who is the winner comes maybe people are going to get health care more, maybe they have very low wages, no wages, you know, people end up in a more free direct provision type system. so when he first or analysis there might be some level of winning for the population as was indicated previously. the big dynamic here really is something that occurs over five, ten and 20 years, which is what happens when the government becomes the control of all the resources. at almost uniformly throughout the world when a system is run this way, it leads to price
setting by the government which by definition leads to supply restrictions and less competition. sort of basic economics are, if a government sets the price below the large market clearing level, people will stop supplying it. that's just a reality. what happens when that occurs? that meets people have to wait longer to get the care they want. so who loses under the situation? basically, and this takes a long time to develop, , so you could enact medicare for all, this will notice for 15 or 20 years, but eventually it will happen and what happens is people wait longer for care and there's less innovation because you bless incentive to bring forward things that the government is controlled the price for pics of who loses under that? it is basically sick people. and so i think here you have to understand that why is there push back against medicare for all? it's mainly because people worry
about what he would do to the quality of health care overtime, particularly for people who need a lot of intensive care and would benefit from innovation come having the best people go into medicine, all the things that happen when it's less controlled by the government and happen to a lesser degree when it's is controlled by the government. this this is the hard real medie for all which is, one of the -- one of the point which is very important, is a lot of cost of nationalized government controlled system are off the books. the way to measure whether that something is causing something is usually done in the financial term but how do you measure what people have to wait longer or there is no innovation that would've occurred otherwise? something didn't get made that would've helped the patient if someone had incentive to invest in a 15 and 20 years ago. those are off the book costs that occur in uk and canada and ultranationalist systems that are not measured and they are
artificially lowering the costs come suppose it cost of the system. they cost more because people would pay more if they could get the services faster, but they can't. there's a whole dynamic year of a lost opportunity with medicare for all that it think is very important to understand. >> can i push back to just make this point? this is a point senator sanders often makes an argument for medicare for all. it's easy to criticize would look at the polls but keep in mind where current health care system looks like. the point he often makes is people are already paying more money out of pocket. look at employer-sponsored coverage, , the average premium now for employers is 20 grand the year for a family, costs have been growing faster than inflation for a long time. if you look at, there was an analysis of the medicare for all plan and even it concluded it would be a reduction in both national health spending and personal health spending by two
to 4% if you want to medicare for all system. heart of the point he often tries to make is okay, you talk about all these costs, but at the end of the day, these services are being paid for by somebody. what we will fight but is not necessarily were cost which is cost that are going to be borne by the government versus directed by the consumers. >> i want to clarify this. for some reason i think bernie and warren have both make this argument never make it very clearly, and you did make it clearly there, but just to emphasize what, if you take taxes paid that go to health care and you compare it to the premiums that i pay and the premiums at the "washington examiner" paid, he's saying why do i care whether it's coming out of my wages can come in out of my paycheck coming out of my taxes? it's a redistribution and so the higher wage people will be paying more and the lower wage people will be getting more health care than they used to.
what's wrong with that i get? >> you might notice the difference if your taxes go up and your friends whatever which your brother might not have a job because the economy is not growing the way it would have if you are paying for premiums instead of taxes. but more broadly speeded which brother likes. [laughing] >> i know which one. >> we all know which. we all have that brother. but more broadly than that, i think it's a mistake to say that the medicaid is study says that under, or the mckay to center concluded the scent of proposal would save money. because what they said was if you take all of the bernie sanders plans at face value and assume their possible, and yes, that is how the numbers work out. but it is politically infeasible
for the sanders plan or that congress would enact the medicare for all plan that would reduce prices by the amount that senator sanders in vision, then it is not possible say that a america for all plan would reduce them would reduce the prices that health care providers get paid and, therefore, would be a wash for most people in terms of taxes going up by no more than premiums go different taxes would go up by much more because, at this gets back to something jim mentioned. yes, if the governor sets the price too low, then you get shortages and whatever is one assumes medicare sets the price is too low. medicare often sets the price is to either the bob is that there are always too low. it's they could be too low, too high, the government has no idea and adult self correct. they are just as often too high,
and so, that's what all that money, like hundred million dollars per year that is being plowed into lobbying on health care in washington, d.c., it is going to do, it's being invested in lobbying for usually higher payments to health care providers. >> this is my question when we say drugmakers will probably lose and hospitals are worried they will lose, we just think again about how obamacare happen or about how we generally see the sausage gets made in washington. i want to tell a plausible story about medicare for all could pass, which is that when we get a senator warren and you try to do this and she fails but she does what george w. bush doesn't has a good midterm and the jets a bigger democratic majority,, just like industry reacted in 2008 right after obama won, the insurance lobby came out and said hey, we will cover existing conditions, limit our price discrimination based on age,
committee rating stuff as long as you cover everybody. they cut a deal and so you could see the hospitals, the drugmakers, the doctors, i don't know about the insurers but you can see the provided cutting a deal and saying just give us cao make sure you pay us enough and we will go along with that. so then you get a medicare for all that industry signs up for. is that the fantasy? >> obamacare happen so lends plausibility the idea the same thing happened with medicare for all. but it's hard to describe how much heavier of it medicare for all would be because there's no way the insurers get on board with medicare for all, first off. >> and less maybe they do what senator kamala harris -- >> in which case we have to buy off the insurance companies, right? and you could buy up all the hospitals and all that but you're still talking about removing hundred 75 million americans from their private
employer-sponsored health plan and you would have to put something in there for employers who would be worried about all of the workforce disruption that would, if people didn't have to stay with her jobs anymore. the number of people you would have to buy off, and that's what you're talking about, it could happen if government by soft enough people that that drives up the cost of a medicare for all plan. >> you make a good point about what with the rates be because that's what the doctors, hospitals, provided or would you bet. the united states sin has seen a 40% reduction in payments over,, under what they getting now, which i mean you're right,, politically you would have the industry just completely screaming in the air of congres congress. >> discussed with the cost of what is medicare for all and if you're going to pay hospitals and doctors more, it's going to cost more over all. i think i agree we are pretty
far away from congress actually able to pass anything like this. but you can tell the industry is really worried because last summer is when they formed a partnership because they sought being talked about more a month democrat running for president, and there really worried this is kind of where the party is going. and i agree if congress were going to do something like this, it would have to involve higher rates to providers. they would have to be some kind of role for health insurers. i don't how you get firm on board -- pharma onboard. >> we would talk but winners and losers if medicare for all got enacted. that's the premise of your initial question. maybe one thing to think about is who are the winners and losers from the debate about medicare for all before gets inactive. >> was besides the people on stage. >> right, besides you having the event. far be it for me to offer advice to the democratic party that
this is basically a loser for the democratic party because they just, ten years ago, spent a lot of political capital and acting the affordable care act. i mean, i maybe have little amnesia here that i do remember that resident obama sold to the car just being a gigantic step toward universal coverage. and if not the answer to universal coverage and i would turn on the immigrant debate and the spending all this time say we have never achieve universal coverage. we have to do this, some kind of nationalized plant. there are probably a few americans saying did we already do this works the answer is we did already do it. why are you spending all this enormous political c c-uppercase-letter the kevin hassett take over the whole system when you look at the data that says okay, 30 to make people without insurance in the united states, that seems to be the first order thing they say they want to solve with medicare for all.
but two-thirds of those folks are already covered by provision in the affordable care act that can get on medicaid or they can get an employer plan or they could be in the ac exchange and the heavily -- >> this is important thing. >> let me finish a couple more points here. i won't filibuster. then there's another group out there in the non-expansion states, about two, 3 million people are low income and poor and can't get on medicaid. they are a highly sympathetic grouper they don't have a good entry point into some kind of insurance system. and then there people that have enough income to buy insurance on their own at least according to the affordable care act structure. then the last group of the people, folks who wrote the ac including the obama administration specifically excluded which were people who were in the country without proper documentation who couldn't get subsidized insurance for that reason. it seems to me it could be very
difficult to square this circle and say now we're going to cover them in a way the democratic party didn't do ten years ago. and secondly, extend able subsidies to people that are already being offered subsidies to get in the coverage today. >> now we have to turn to the rest of the country that is currently in charge. the sales pitch to them is a few parts. one, wouldn't you like to be able to switch jobs or one of the pair stay at home or something without worrying about losing health care? this is the pro-enterprise argument to some extent from medicare for all, is you can go and start your own small business and you will be covered. as a lot of people the might of insurance currently through goldman sachs but to want to go and start their own little bake. everybody was covered they could go off and do it. and two, just people have a lot of really difficult feelings with health insurance companies that don't pay and maybe they believed that the government will be more fair. you might laugh at that cycle
and at least address the general i idea that people currently have insurance might think i would be better off, i would be more secure of these, like all of us have kids and we worry, if i lose my job, how am i going to pay my health care bill, to take away that fear might be very valuable to patients. >> i think politically it makes sense that's what democrats are speaking to because people are discontent with the health insurance and prices are going up. i think democrats have successfully also taken over this issue pre-existing conditions and tried to harness that against republicans. as we all know the trump administration is refusing to defend the affordable care act in this constitutionally challenged and were expecting a ruling on that any day now. but yeah, i mean, i think they're still although discontent with health
insurance. the aca didn't fix a lot of that. obamacare has been so politicized that people think about as it's a lot bigger than is. on the most, touch part of individual market, about 20 may people cut coverage under it. we already have the mechanisms to ensure a lot of these people. the numbers i've seen show about half of the people who are uninsured are eligible to enroll in medicaid or get into the marketplaces antidote for whatever reason. then your talk but a pretty small, small subset of people left. this is also the argument that the interest has been making, which is why are we talking abt this huge overhaul when we really should just be focusing on this ten-20 million people that we do need to provide coverage for. >> i think the main way that a medicare for all proposal would reduce the problem of job loss is by tossing people out of jobs and eliminating jobs that would
otherwise be created. you don't have to have the government take over the entire health care sector in order to solve the problem of job loss to all you need to do is come all the other things the government was doing, the reason job loss is about is because summer along the line congress and the irs made a series of decisions that says that he get insurance through your employer, it's not taxed, but if you take that cash, the $20,000 as cash wages, they did is taxed and so that creates effectively puts a a penalty on anyone who wants to control that enormous chunk and by the own portable health insurance that stays with the job to job. 80% of people with private insurers have real awful form of health insurance that disappears when your job disappears. and so it is strange, this dynamic with the government gets
involved in health care sector makes this huge problem and the solution is always, what? more government. you mentioned there's a lot of dissatisfaction with health insurance companies. i show that dissatisfaction. part of the reason is because most health insurance companies in the trade work for someone other than the consumer because the money is not come from the consumer. it's coming from an employer so that's make sure the employer is happy and did have a long-term relationship with the enrollee because they don't have, enrollees will only be with them as long as they are working for the one firm. but also look at the aca. the aca was supposed to fill a lot of these gaps in the insurance market that were created by the same tax exclusion for an employer-sponsored insurance but has also sold dissatisfaction with insurance company. obamacare pre-existing pre-existing provision themselves are directly making
health insurance worse for people with very expensive medical conditions like multiple sclerosis. document into economic literature, those provisions provisions are making things worse. by the way if you ask people whether they support the issue of existing provision, inking disco nation against people with pre-existing conditions, they said yes. 80% if you ask them what of the coverage would get worse for you or your family? support drops consistent. these are not popular provisions. what they're doing is making people more dissatisfied with private insurance compass which you're right does prepare the ground for a government takeover of -- by jeff asked the question if all these well-intentioned government intervention are making us less and less satisfied with health care, is that could happen with single-payer as well? >> but here's the thing. republicans didn't have the guts to try to actually do what many would say is real reform health
insurance which is to decouple health insurance from a job. this is been a system that we've had in decades and decades, and there's not going to be the political will to do it. look back in 2017 when republicans came out that with the repeal replace big sweeping reform bills. i think that's one of the reasons they have fallen down over and over again in trying to come up with a viable replacement because they haven't been willing to sort of take that -- >> wait a second. there's in history that needs to be explained here. .. with a $5000 tax credit toward health insurance they would lose if they didn't buy healthcare. a universal coverage plan on
individualized households. and it had all kinds of provisions. president obama, then senator obama ran hard against that and famously purchased $120 million in october 2008 before the election attacking senator mccain and taxing health benefits for the first time in history and a year later he proposed tax benefits for the first time in history. the debates can be quite high. there has never been offered a proposal to move any more market-driven. lost the election for a lot of reasons. >> this is before my time.
>> you have to have a healthcare proposal functionally identical to an individual mandates. you have to talk about it on the part of republicans. essentially an individual mandate. that was john mccain's plan. i will be a little harsher on republicans -- >> there will be a rebuttal to you in a minute. >> republicans have never invested in healthcare. it is not their thing. a joke is what the republicans and christian scientists have in common? they don't do healthcare. and it really shows. they have never invested the sort of money and human capital trying to advance a real free-market set of healthcare reforms. it doesn't mean they haven't
made any progress or haven't made progress and i'm not a fan of this administration, and health policies. the interpretation of exemption from federal health insurance in the aca, something called short-term limited duration, we change that interpretation to create a parallel free-market and health insurance on that side of the aca. despite the name they can provide secure health insurance to people that is portable between when they move from job to job. that happened because of a few people in the administration committed to healthcare. the republican party accepted that level of critical mass to change regulatory interpretation of the statute.
they can't pull that off on a congressional level. >> i'm not one to defend the republican party. that is not my portfolio. the idea that the reason more market-driven healthcare hasn't happened isn't part of our system and wouldn't describe it that way now. the biggest opposition is the democrat party. the democratic party was incrementally pushing many policies to try to have -- it is just there point of view, they would have their government control sources rather than a consumer driven market system. and sell that point of view, and to the opposition to sell another point of view. and more and more regulations with subsidization of the
system. we are at a point that if we don't want to keep going down the road, we have much more aggressive promotion of -- >> the other part of that is industry lobbyists. the fact that the democrats and the left care a lot about healthcare or can't explain why republicans don't care. look at the landscape across washington dc and across the country. how many foundations are there on the left with huge piles of money. a few off the top of your head. it was a case of free markets. think the health policies -- think of all the health policies you know in washington dc. how many on the left and how many are on the right? there is a huge wonk gap and it
shows in the proposals we see from republicans at as we explain that asymmetry explains why there's a leftward trend in health policy but i don't think we can let republicans off the health for that. and to return -- the swamp factor, industry lobbyists benefit and congressional staffers who write the bill that become industry lobbyists benefit the more we have a network of subsidies and regulations. they are much more relevant when guys go at it on your own. >> they co-opt the free market outside. be administration proposal to reduce prices medicare pays for physician administered drugs. this is a proposal that would reduce government spending by
$8 billion a year according to the assistant secretary -- what is happening? you have conservative groups taking on page ads, the wall street journal saying this is important for price controls. and op-ed on the idea of medicare already uses government set prices to come up with how -- the makers of these drugs. what is happening is farmers going to conservative groups and saying support more price controls, conservative groups don't think about these things and say we hate price control and will do that and all of a sudden big pharma, they are supposed to be limited government, advocating for higher government spending in the name of reducing the size
of government. >> i think republicans are against two main things. the party, when you are the party of less government spending, talking about an issue that is just as expensive, it will be harder for you and healthcare costs have skyrocketed in the last few decades. and that is great in a way. and an example of another developed country where you would have free-market systems. it is a really hard thing to figure out. healthcare is a unique kind of good. i would like to say it is the only good you can purchase when you are unconscious. if you are going to value human life in a country that values human life, we require emergency rooms to get care to
people who walk in their doors and you may or may not be able to pay for it that means we have a lot of healthcare spending and healthcare costs and how do you cover that and that is why democrats are more readily turning to government solutions but that leads them with the question how to pay for it. >> i want to pocket taylor swift's album in my iphone. >> i promise you it is not intentional. >> we talked about a couple other policy proposals and an example of why it is important to discuss who benefits. you talked about surprise building regulations. one of the counter arguments is if you pass these rules prices might not come down and when we see hospitals lobbying against these regulations that seems to be lie that argument but what do you see as a virtue of the
rules you are talking about? >> on that one the first thing to understand it is a real feel your of the insurance industry. nothing says they couldn't be doing whatever they need to do to corral the outlier providers who are doing surprise bills, anesthesiologist, path dollars a stand radiologists. go in for elective surgery, go to a hospital that is in network and they send you a bill saying the anesthesiologist was out of network. why does the insurer let that happen? they could have contracted with the surgeon and that you can't use out-of-network anesthesiologist. hospitals don't have out-of-network anesthesiologists. they don't want to deal with the fact the anesthesiologist has a lot of leverage. the first-order thing, push back on the insurers and hospital say we can't do that, we shouldn't have to regulate this but because of your
failure, you have to when you say something is in network make sure the whole express owed is in network. that would get rid of 90% of the problem right there. now they are saying we can't deal with these anesthesiologists who are going to beat us up and make them pay them a lot of money. that's your problem, figure out how to get a lower rate. that is why we have you. if you can't do that, why do we have you? i would push back hard on insurers who say you have to solve this problem. having said all that i think senator alexander's bill is as good as you are going to get out of congress so don't ask perfection and they say you got to be inside this in network system now and we back it up by saying you can't charge more than the median rate in a market. i would prefer they haven't done that and just thought it out between the insurers and
the doctors, but that is the way the political process is. i can live with that solution. i think this idea that you need to take these things, send them into an arbitration system and have some elaborate way of deciding what the fee is for a $2000 anesthesiologist is crazy. why do this at the national level? like a huge sledgehammer for a little nasty that should just be killed and gotten rid of the. that shows this is an indication when you get medicare for all -- it would be a mess. >> in the latest edition of the cato institute's regulation magazine, we have dueling articles on medical bills, one by senator alito, arguing a forced integration model like what jim was talking about and the other argues for
arbitration. when billing comes up as an issue i always wonder why aren't insurance companies marketing themselves to consumers on the basis of if you sign up with us you will never see a surprise bill? the answer is consumers are not generally purchasing their own health insurance. they want to control their own money. there are other obstacles they put in the way in the form of integration, jim and bennett are talking about and force through some targeted regulation. 100 years of government intervention has prevented plans like kaiser permanente from providing a lot of the efficiencies in an integrated system like that can offer including but not limited to reducing the problem with
surprise medical bills or very close to 0. i don't have any confidence in the approach that says congress will solve this problem by setting a price except through an arbitration process in this market. or congress deciding we are going to write other terms of exchange between insurance companies and consumers and providers by forcing them to integrate. this is a problem market developed a solution to 70 years ago and if we let that process unfold, reduce barriers to these sorts of plans we wouldn't be having this conversation. >> i would add this is the prime example of a problem
everybody acknowledges and everyone says the patient should be held harmless, patient should not pay the medical bills and yet it is devolving into an industry fight. you have patient advocates in the hospital on one side you want to do the benchmarking and doctors on the other side. i didn't realize it was going to turn into this much of a fight. >> good for the lobbyists, they are the winners here but you mentioned doctors. we have a couple more questions and i will take questions from you. is it possible the losers of medicare for all for instance would be industries that are currently collecting rents? currently profiting above and beyond what they ought to be whether you are talking about social justice or free enterprise?
and doctors are overpaid and if you are putting in place medicare for all there can be a medicare for all veterans their profits, maybe a few fewer mansions and chevy chase would sell to doctors in dc but they would keep being doctors and prices would go down, single-payer negotiating a lower price. >> medicare payment advisory commission is a commission that advises congress and the administration on how much medicare should pay for. a wonderful quote in a report they should last year that we have known for some time, we have been aware for some time that there is a problem between how much primary care physicians and special surveys and how much medicare pays them, primary care physicians are paid too low-end specialists are paid too much relative to primary care physicians. my favorite part of that is we have known for some time.
they have known this problem is there and some people are getting overpaid and primary care physicians are overpaid as well in terms of quantity. this problem has existed for decades. no one does anything about it. congress is not done anything about it because lobbying power of the special interests provider groups. another quote in the same report where they say we are becoming aware, a good way to pay for primary care in the first place. government doesn't learn very quickly. he keeps mistakes whether they are pricing errors or errors in how they structure the payment, primary care providers apart from the price but there are overpayments in the program and the medicare for all system is
a mistake to think those payments are going to stay first of all as low as they are so you will meet the bernie sanders target or that this is going to correct those pricing errors over time with the same sort of pricing errors we have in the program right now. >> the premise of the question is new negotiators come in and figure out the right price for a paid physician but what would they use as a way of figuring that out. it would be an arbitrary basis. in 1989 the congress create an arbitrary basis for paying physicians, developed and reformed a couple times but basically the structure has been in place all these decades since. when they created it in 1989 they thought they were going to rejigger the primary care.
and specialists and primary care, the opposite happened and this is another of those things the government thought they solved and they didn't. if the government got involved we set the prices for everybody. i have no doubt they could find a price. they get things wrong on the upside, they set a low price and say we can only afford x because of reconciliation and congressional budget office storing and whatever else is constraining it and they set a price and it would lower substantially but they have no idea -- >> they get the price too high. look at part b drugs it is inflationary. whenever you hear about the
differential practices because they know they get paid more to provide those services in the hospital than outside a hospital. we are paying too much there. any time you hear about opening a specialty box they know medicare is paying too much to hospitals, they will make a lot of money. i pulled the numbers on medicare payments for knee replacements, average payments for somewhere i can get for you. the amount the surgery center of oklahoma charges for knee replacement inclusive of the surgeon and anesthesiologist is lower than the price of medicare for the same procedure without counting the medicare payment for the surgeon's. medicare pays too much.
this is an example of the industry lobby. when you have you heard and industry lobbyists a medicare paid too much? we stop and lower our payments. billy tauzin said it in 2009-2000 and when they make an $80 billion contribution to pass the affordable care act. if you do the numbers the headlines for pharma, pharma was making a bandage. when they say it is not true, the government overpaid for healthcare more than people realize. >> i think that is a key question. that is part of the reason, we will see possibly how it plays out. questions, we have microphones in the back if you raise your hand, a microphone will be brought to you and identify your self and ask your question in a question like format but
the one more question i'm going to ask, did the drugmakers make a mistake in supporting obamacare? i write about lobbying all the time, they are supporting this because they are going to get rich but lobbyists like government people don't have a perfect vision of the future, was it a mistake for drugmakers and or hospitals to support the passage of obamacare? >> financially, morally, what are we talking about? >> did their shareholders lose out from the bill passing? >> how many more insured people as a result of the aca, 14 million? people who don't care about the cost of their drugs? the price of hormones and oral contraceptives happened to shoot up after not the passage
but fool enactment of the aca coverage expansion, 100% coverage. and the prices for those drugs skyrocketed and they know when they have a fully insured patient they can get away with higher prices because if an insurance company tries to remove the drug from the formulary the patients -- it is all downside to them so they scream blood he murder about that. the drug manufacturers now. it is a cynical, socially irresponsible financial level. that is a good move. >> i like libertarians making moral arguments about maximizing profits. >> talking about plunder.
>> i don't think it was a mistake to support it. a lot of rural hospitals have been struggling under insured areas. they had more patients in their care. >> questions from the audience? have one upfront, a microphone up there. >> i am bella. could you speak to healthcare plans in other developed nations, universal healthcare plans and other developed nations and how they compare to the current system and another possible healthcare system? >> most other advanced economies have some kind of system that involves a lot more -- not a lot more but put it this way. the government get involved to a degree where they control the system through the legislative process, regulatory process or some combination of that.
there is a lot of variety in terms of the health system some rely on private not-for-profit private insurance companies to deliver care like switzerland and germany do and some have direct government provision all the way across the board like the uk. they own the hospital and pay the physicians directly through the government so there is a lot of differentiation across these countries. the big point to understand is something i tried to set the outset which is what drives a market-driven system is the resource allocation is outside the control of the government to some degree in the hands of people, consumers making decisions and the people they interact with making decisions and more nationalized systems in western europe and canada and the uk and australia the government is the final decision-maker on those questions.
some level of total spending, they say here's how much we are going to spend on physician salaries and services physicians provide, the price of drugs, they get more involved in resource allocation decisions and in the end that is what the crux of the matter is. in those countries the development of new products and innovative ways of taking care of patients has diminished because of that and moreover there is a resource allocation, misallocation going on that is making it harder for particularly sick patients to get the care they could have gotten otherwise. >> let's walk to the type of patients who benefit in a more socialized system and it could be somebody who needs a drug that wouldn't otherwise be
invented as the clearest example of those in a more socialized system possibly but on the other hand the poor person who needs basic healthcare who currently benefits from medicaid or little richer and if you were to talk to different classes, the older version is younger or chronic illness versus acute. what do you see as the winners and losers of systems? >> i haven't studied a lot of other systems that much but my understanding has been the losers in more socialized systems are people who are trying to get into the doctor and there are more problems with physician shortages presumably because of lower compensation. i was going to say earlier there's a lot of talk in the trump administration about the fact that a lot of the funding
for new drugs happens in the us because we don't put the same price controls on drugs so the administration is working on a proposal right now which would peg certain medicare payments for drugs administered by doctors to an index of lower prices in other countries. the idea is they are free riding to where they are relying on us to allow high prices which fund r&d for the pharmaceutical makers and other companies are benefiting for developed of those drugs while keeping those price controls so people aren't paying as much. that proposal got a lot of pushback from the pharma but they are still working on it. >> there is a fundamental misunderstanding that guides the discussions. and that is the idea the united states has a marketing system,
not all countries have government dominated systems and that is why the united states leads in terms of medical innovation and other countries are not pulling their own weight in that regard. that is a mistake and there's another way of looking at this to explain the phenomena and. the united states doesn't have a free market in healthcare by any stretch. the greatest trick advocates of socialized medicine ever played was to convince the united states that we don't already have it. we have every form of socialized medicine. look at the veterans health administration. you want canadian medicare system? our medicaid program looks a lot like that. the german system involves employers a lot, the swiss system look like obamacare. we've got it all right here. the melting pot of socialized medicine, who controls the
money of the us healthcare circuit? 50% of healthcare spending is done directly by the government. when the government takes away $1.5 trillion from taxpayers and spends on healthcare. >> you hear people say get the government out of my medicare. >> socialized medicine as well. it goes even beyond that. if you look at a broader measure of government involvement which i would call healthcare spending subject coercion we can throw in 30% of healthcare spending done by employers or pursuant to employer sponsored insurance. the government says let someone else, your employer, control $20,000 of your income and pick your health plan or we will tax you. the government is directing even more of the market, 80% or more. we don't have the market
system, the us health sector was influenced by government and the other advancement but the difference in innovation, our government makes different decisions with power they have. less power than other countries have over health care but make different decisions. in the uk, the government set a limit on how much it will spend on national health service and allocates those resources. they set limits. the us medicaid program don't spend any limit on spending, whatever doctors in the hospital order up. in fact the government does things to push prices up. so no government limits on quantity, a government driving prices skyward with such things as the payment formula for
medicare part d drugs or tax preference from employer-sponsored encourage -- insurance which inspires more insurance and medical care, price rises. this is generating all of the revenue drug companies are able to think about the rewards and an important part of the story but why we have so much more innovation, it is a serious mistake, analytical error, and we have a free market. >> we have one microphone right behind you. >> i am james. earlier this panel will discuss job and employer-sponsored health insurance. my question is how effectively
do health savings accounts, and incentivized employers to provide greater access and opportunity and affordability to health savings accounts to reduce job blocking. >> they don't do much in terms of job -- you are going to stay in your job because you are afraid of losing insurance. hsas don't do a lot, to make insurance more affordable. you might have hsa individual market plan, it might be portable. compared to a world without hsas. if you expand in the right way, turn into a vehicle to receive 14 or $15,000 of compensation that the employer is using to purchase health benefits.
if they expand hsas in that way, any employer who wants to stay in business, and to pay the employer plan. it did not disappear when the job changes. when you expand health savings accounts it is the job loss. >> the employer portion of the premium got them to pay into hsa which would exceed the annual contribution limit and got $14,000 and use that to pay premiums on high deductibles. >> it is part of your compensation that you don't get to control because of the exclusion.
if you were able to control that, it would be an effective tactic, $28 billion is larger than the trump tax cuts or reagan tax cuts. being able to control part of the earnings to control. >> time for one more question. if nobody else has it, i have it. one red jacket here. >> thanks for taking my question. i worked at the progressive policy institute. i wanted to ask, you were talking how medicare may be overpaying in specialties and private insurance pays 240% of medicare rates according to a
recent rand study and so if we are worried about medicare for all costing too much or overpaying physicians then how come private insurance is not doing any better? >> a great question. first of all the system we have today is not a market-driven system. we only have an hour and 15 minutes and a complicated subject. the idea that what we have operates with markets is not true so part of the reason private insurers are overseeing that, they are on the private side. the federal government subsidizes the payment. one thing going on from 1945
on, on the margin, the federal government is subsidizing it on the order of 35%. when you send the next dollar your employer plan $.35 is coming from general taxes. they are built on that structure. it is going to overpay and there is not enough discipline, not enough money coming out of someone's pocket. if you want a markets, the decision says we don't have a next or hundred dollars if we don't have to. not enough of that is going on in american health care to put pressure back on the private side. it starts a lot with the employer system and the medicare system also offers it that way. there was cost inflation, too
much utilization, and when people say they want a market-driven system, and someone has to pay more out of their own pockets when they buy higher cost health insurance. if you don't have that you don't have a market-driven system. we don't have -- we have it a little bit in the united states but we don't have nearly enough of it to have a market-driven system. there for the pricing system is all messed up. people are getting overpaid with inflation, high prices, overutilization and all kinds of problems in american health care because you don't have that kind of system. one other point, it is not easy to get to a market-driven system. there is one element of this that is hard to get around it has to be addressed because there is a massive information. medical decisionmaking -- when
your physician says you need to get this done, there are some people who question it, think about it, look it up on the internet and try to figure it out but a lot of people say i don't think i can figure this out on my own. they need to trust someone to navigate me through the system and because the consumer is not quite in the same position as they are when they go out to buy a car or even a house or a lot of other complicated things, the trust relationship kind of compromises the market and has to be addressed in some ways so the market can function better. >> i am currently not undergoing a spinal fusion procedure my orthopedist recommended for me. why is it so much higher for private insurance than medicare or medicaid? if all we had were a tax presence for healthcare we
would expect that to shift and prices to rise. on top of that a tax preference for health insurance, to shift the demand curve a little more. on top of that we have a tax preference for health insurance purchased by an employer with money we never seized. and prices rise even more. after that the medicare and medicaid programs they have an effect on private prices as well. if the cost shifting effect that everyone seems to think it has where medicare pays below-market rate, provided make it up by charging insurers more, that hypothesis suggests if you reduce medicare and medicaid rates, providers will charge even more. they suggest the more medicare and medicaid pay, the higher
price to go which is very consistent, high prices that were private insurers play are consistent with my hypothesis that medicare is often overpaid. >> pays less. >> i would add insurers love the affordable care act because it was the perfect solution with the government saying we are going to give you money and cover all these people and require them to buy health coverage. i just think you are going to have a system we are talking about, all the issues of private coverage, the system is so entrenched and i don't see movement by republicans or democrats to move away from that. if you look at the democratic candidates they came out of the gate, medicare for all, we've all signed on to bernie's bill and you have seen a lot of them back away from that and say
private coverage, we don't want to take people's employer-sponsored coverage away from them because i think consumers have a weird relationship with her private coverage. premiums are going up, too expensive, we don't like it but we don't want the whole system to be amended and so democrats have seen this politically difficult position so you have seen senator harris suggest this idea of private plans offering medicare plans, and those who just medicare for all who want it. and there are good points about the cost of coverage. and the system is changing insignificant ways in the past couple years. >> thank all of you for coming.
[applause] [inaudible conversations] >> the former commander of central command speaks about us security operations in the middle east. he is joining a discussion hosted by the middle east institute in washington dc. live coverage of 12:30 eastern on c-span2 and we continue booktv programs showcasing what is available every weekend on c-span2. the theme is history. duncan white looks at how cold war propaganda was disseminated in the united states, britain, and the soviet union. delay wise recall the women's suffrage movement leading up to the ratification of the 19th
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